Mapping market momentum
Marketplace and dropship growth attracts more brands & retailers
Businesses have been selling on marketplaces or through dropship platforms for decades—long before the eCommerce surge accelerated by COVID. What’s new now is there are more businesses selling through more online channels than ever before. And it’s increasingly a diverse group of merchants that includes:
Retailers, which primarily sell products from brands to consumers through physical storefronts, eCommerce, or both;
Brands, which own the production and distribution of their products and sell through a variety of channels, such as direct-to-consumer or through retailers
Marketplace native sellers, whose primary business is selling products through marketplace channels
53% of businesses in Mirakl’s global network of 65,000+ sellers and suppliers are brands, 15% are retailers, and 32% are marketplace native sellers.
These businesses have diverse motivations for selling through marketplace and dropship channels. Reaching new customers, boosting profitability and strengthening brand awareness were the top 3 reasons named in Mirakl’s global survey of 1,500 sellers.
In the past, brands were hesitant to sell on marketplaces, fearing brand dilution or loss of brand control. But as marketplaces mature, they’re proving to offer greater control over wholesale, from pricing to positioning. As brands like Puma, LK Bennett, and Villeroy & Boch double down on marketplace sales, they’re playing a bigger role relative to other types of sellers, growing from 21% to 30% of overall GMV across Mirakl-powered marketplace and dropship businesses in the past year.
For US sporting goods brand Lands’ End, selling on marketplaces is attracting new customers to the brand and driving revenue. While overall Q4 2022 revenue was down, the company’s revenue from selling on marketplaces was up. “These new customers come in through these marketplaces: 75% of them either never shopped at Lands’ End or are lapsed customers and haven’t shopped at Lands’ End for five years,” according to former CEO Jerome Griffith.
The increased number of sellers is also linked to the growing volume of opportunities beyond the likes of Amazon and eBay. 56% of businesses sell on more than 2 marketplaces compared to 50% a year ago, according to Mirakl’s analysis.
For example, Macy’s Inc., which launched its Mirakl-powered marketplace in September 2022, added 500 sellers by the end of its fiscal quarter, and added another 450 in Q1 2023. Macy’s plans to grow by about 2,000 brands this year in areas that are new categories, new brands, new styles, sizes, aesthetics and demographics, according to head of marketplace Josh Janos.
Another example is home improvement retailing company Kingfisher plc, which launched its first Mirakl-powered marketplace on its brand B&Q’s diy.com in March 2022. Since then, the marketplace has added 400 carefully selected third-party sellers with an additional 340,000 SKUs across 18 home improvement categories.
Looking ahead, the marketplace ecosystem will continue to grow. 62% of sellers surveyed plan to sell on more marketplaces in the next year.
